The Monetary Policy Committee (MPC) of the Bank of England has voted by a majority of 6 to 3 to maintain the Bank Rate at 4.25%.

The BoE stated: “Underlying UK GDP growth appears to have remained weak, and the labour market has continued to loosen, leading to clearer signs that a margin of slack has opened up over time. Measures of pay growth have continued to moderate and, as in May, the Committee expects a significant slowing over the rest of the year. The Committee remains vigilant about the extent to which easing pay pressures will feed through to consumer price inflation.

“Twelve-month CPI inflation increased to 3.4% in May from 2.6% in March, in line with expectations in the May Monetary Policy Report. The rise was largely due to a range of regulated prices and previous increases in energy prices. Consumer price inflation is expected to remain broadly at current rates throughout the remainder of the year before falling back towards target next year.

“Furthermore, global uncertainty remains elevated. Energy prices have risen owing to an escalation of the conflict in the Middle East. The Committee will remain sensitive to heightened unpredictability in the economic and geopolitical environment, and will continue to update its assessment of risks to the economy.

“There remain two-sided risks to inflation. Given the outlook, and continued disinflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate. Monetary policy is not on a pre-set path. At this meeting, the Committee voted to maintain Bank Rate at 4.25%.”

Industry reaction

Sharon Beedham, Relationship Director at ONP Solicitors, said: “With inflation flat and geopolitical noise fuelling rate-cut rumours, it’s telling that the Bank chose caution over reaction. That speaks to how fragile the economic balance remains — but it also underlines that the recovery is on firmer ground. In the current climate, a steady hand from the Bank of England offers more value than a rushed rate cut.

“What’s especially encouraging is the spike in first-time buyer activity despite the end of stamp duty incentives. That shows that real demand is still there — not just stimulus-driven. For many, consistency is more empowering than volatility. A held rate, while not headline-grabbing, gives movers a window to act with more certainty and less fear of shifting sands beneath them. And just as importantly it provides the industry with the space to plan, scale, and improve service without being blindsided by policy volatility.”

Nick Leeming, Chairman of Jackson-Stops, said: “Holding rates today reflects the air of uncertainty that has entered the UK economy. A combination of geopolitical tensions, as well as continuing inflationary pressures at home, has resulted in any rate reductions being deferred until later in the year. 

“The economy, while not in unchartered territory, is having to adjust in real time to manage inflation and reassure consumers. For the property market, today’s decision to hold rates will not immediately effect mortgage rates on the market but it may cause slight hesitancy to enter into the buying process.  

“Committed buyers will not be knocked off course by the Bank of England’s actions today, the market remains in a robust position with completions able to take place. Further proof of the market’s resilience is being seen across the Jackson-Stops network with a notable uptick in new listings in May compared to two years ago. High volumes of buyers and sellers are willing to press on and take their next step irrespective of wider economic headwinds.”

Guy Murray, Co-Head of Short-Term Finance at West One Loans, said: "It’s disappointing not to see a base rate cut at this stage, particularly as the Bank of England now takes a break until September. The market needs stimulation — whether through monetary policy or direct government intervention — and continuing to delay that support risks stalling the progress we’ve seen in recent months. 

“For borrowers in the specialist finance space — especially developers and housebuilders managing larger, more complex funding needs — the lack of movement in rates keeps borrowing costs higher than they need to be at this point in the cycle. The market doesn't just need stability, it needs momentum, and rate cuts are essential for driving that.

“There’s now growing concern that we may only see one cut in 2025, which simply won’t go far enough to unlock the full potential of development activity. Developers are eager to get projects moving, but they need the right financial conditions to do so — and that means action, not caution."